These go to eleven
Caesars’ iCasino growing at more than double the rate of competitors
CEO Tom Reeg says iCasino will be worth $250m of profit in years to come.
Better Collective confirms job losses.
Lottomatica talks bolt-on deals for 2025.
Fantasy football platform RotoBot AI is the startup this week.
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Amped up
Is it any louder? ”Extraordinary” growth in iCasino of 83% was the highlight from a digital business, which CEO Tom Reeg claimed would generate a “hell of a lot more” than the target of $500m in annualized adj. EBITDA that “everybody's been wringing their hands about for the last three years.”
Reeg boasted that Caesars was now seeing its iCasino operation expanding revenues at more than two times that of its major rivals.
Asked about the contribution to the $500m figure, Reeg said the split between iCasino and OSB would be ~50/50.
One louder: Caesars launched its Horseshoe iCasino app in Michigan last month and recently launched in Pennsylvania and West Virginia. It is the company’s third iCasino brand after the Caesars and Caesars Palace apps.
Reeg said any further regulated iCasino states would “move the needle dramatically more” than a new sports-betting state.
Frothy eloquence: Notably, Caesars in part funded the anti-OSB effort in Missouri ahead of next Tuesday’s ballot vote but Reeg was unapologetic.
Asked about the stance, Reeg said Caesars wanted OSB and iCasino “in every jurisdiction that we possibly can.”
But he added it was “important that it's done in a manner that makes sense for the operators and for the state.”
He said there was a “well established path of legalizing and licensing” through the operators that have “invested substantial amounts of capital, employed thousands of people and paid hundreds of millions of dollars in taxes.”
By the numbers: Total online revenue grew 40% YoY in Q3 to $303m while adj. EBITDA for the unit was up from $2m to $52m. Reeg said the company expected a “strong” Q4 despite the poor sports results.
CFO Eric Hession added that October was “not going to look great for anybody relative to what they were expecting” after the “single worst combination of results” a fortnight back.
Total revenue was, however, down 2.6% at $2.87bn while adj. EBITDA fell by 4% to $1bn, with the damage largely done by a 13% decline in the regionals business.
On the regionals, Reeg said there were a “lot more headwinds than tailwinds” as the business moves towards the end of the year and into 2025.
Nothing to see here: In Las Vegas, he said there was “nothing to read into [it] other than continued strength.”
Linq-ed in: Caesars also announced the completion of the sale of its WSOP business to NSUS Group, the owner of GGPoker, and the sale of the LINQ Promenade to TPG Real Estate and Acadia Realty Trust for $275m.
Reeg said more non-core sales were likely, although he did add that these two were the “simple ones.” “The stuff we’re working on has a longer tail and or lower probability than the two that were executed,” he added.
He noted the number of incoming calls inquiring about potential asset sales had also increased over the past three months “There is a whole lot more inbound activity post the first Fed move,” he added.
Analyst takes: Saying the “online story has legs,” the team at JMP suggested the business was showing “continued momentum,” while Truist noted the commentary about improved parlay and cash out mix following the ZeroFlucs acquisition.
Curb your enthusiasm: Less positive was the consensus earnings miss on both Las Vegas and regionals.
The Deutsche Bank team said it has “curbed” its forecasts for the next three years for both segments.
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+More
Bandwagon: Robinhood has launched presidential election batting markets ahead of next Tuesday’s vote. The company said its contracts are offered via a deal with ForecastEx, a futures commission merchant regulated under the CFTC.
The markets will be available to US citizens only and Robinhood specified that anyone attached to the US presidential election or politics is forbidden from participating in the market.
Additionally, each bettor must be approved by Robinhood Derivatives in order to participate.
For more on the current prediction markets frenzy, see today’s edition of The Token Word.
Glitnor has acquired European-facing iCasino operator OneCasino for an undisclosed sum. OneCasino is currently live in the Netherlands, Spain and Denmark and has plans to enter the German market.
According to the press release, on a proforma basis OneCasino will generate over €150m in GGR this year.
The company has its own in-house games studio, which Glitnor said would complement its existing games studio and PAM business.
👀 Gaming affiliate provider Acroud said it is postponing interest payments for its SEK225m ($21m) senior bonds until October 31. The payments were originally due on October 7.
Better Collective job losses
Re-org chart: Jesper Søgaard said he has shared the details of the cost-cutting plan internally in the wake of last week’s profit warning as rumors do the rounds that the company has shed hundreds of employees.
Sources suggested up to 100 people have been let go in the US with as many again losing their jobs globally.
As of the time of the company's annual report earlier this year, it said it had 1,200 staff at 20 locations around the world.
Warning from history: Better Collective's warning came late last week when it blamed its revenue downturn on lower revenues from the US and what it said was a “continued slowdown” in the Brazilian market. The shares fell nearly 40% on the day and are now down 60% this month.
Søgaard said yesterday via a LinkedIn post that the company had made the “difficult decision to part ways” with a number of employees.
He added that “taking these steps now is essential” in order to right the ship.
Earnings in brief
Lottomatica: CEO Guglielmo Angelozzi suggested further consolidation within the Italian betting and gaming market would likely not come from any further bolt-on deals but rather through organic growth.
He was speaking after the company said revenue in the nine months to September rose 19% to €1.42bn while adj. EBITDA was up 13% to €426m.
He said there were “probably” opportunities in 2025 for more acquisitions, suggesting deals could be done in the machine sector as well as in sports betting.
Star Entertainment: Revenue for FY25 Q1 fell 18% year-over-year to A$351m ($231m), with the company attributing the decline to weaker demand alongside the effect of the imposition of new regulatory constraints. EBITDA tumbled to a loss of A$18m.
Star said it continues to work with the New South Wales regulator in the wake of the findings of the Bell II Inquiry, which saw the company retain its license to operate by the skin of its teeth.
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By the numbers – Nevada
Froth off: The Las Vegas Strip saw revenue dip 2% YoY in September to $728m, contributing to a 7% YoY decline in Q3. The team at Macquarie noted the monthly drop-off was due to a 40% YoY drop in baccarat.
Brighter news came from the locals side where revenues rose 15% YoY and Downtown, which was up 12%.
The team at JMP noted the strength in sports betting where revenue for the state as a whole rose 30% in September to $80.9m while in the Las Vegas Strip it was up 16%.
The team added that this was a positive for Caesars given its sports-betting exposure in Nevada.
Venture playground
Startup focus – Rotobot AI
Who are you? Founded last year by Aishik Lala, CEO, David Zinland, CTO, and Ayan Chowdhury, head of data and AI, RotoBot AI has recently added Kevin Adams, founder of fantasy football data company FTN, as its COO.
What’s the big idea? RotoBot AI is a fantasy football platform that “harnesses the power of artificial intelligence to deliver personalized insights, trends and player recommendations,” says Lala.
The company is tapping into an “underserved market of fantasy players seeking more advanced tools that are easy to use, moving beyond traditional expert opinions and generalized advice.”
With the fantasy sports market booming, the goal is to provide users with a “unique edge” by offering data-driven advice tailored to their specific league, roster and preferences, he says.
This is achieved through “revolutionizing” the way users make decisions in their fantasy leagues by “simplifying complex data, empowering them to make faster, smarter moves.”
Funding backgrounder: To date, RotoBot AI has secured $100k in angel funding and a $200k server credit grant from Microsoft Founders Hub. It is preparing to close a seed round shortly.
Growth company news
Getting the horn: Karl Flores, one of the founders of the esports-focused betting company Unikrn that was sold to Entain and subsequently shuttered, has said via LinkedIn that with his non-compete now at an end he is “back in the industry.”
“While my previous venture was a success, my time reflecting post-exit left me with a sense of unfinished business,” he wrote.
Way back when: He added that “in the past” his business had pioneered “world-first products” in the areas of streaming, virtuals and skill-based video game wagering.
“But with the industry constantly evolving, this new era – and the new generations it brings – calls for a fresh approach,” he said.
“The betting world has changed. With a bold new idea and a vision grounded in experience, I’m ready to make an even bigger impact in this fast-moving space.”
Pitch ICE
Barcelona bound: Clarion Events has opened up applications to take part in the pitch competition at this year’s ICE event in Barcelona. Anyone wishing to enter should click here. The application window closes on November 25.
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Events calendar
Event highlight: Next week’s 2024 Gaming in Germany Conference, being held on Tuesday at the Hotel Adlon Kempinski in Berlin, will feature a raft of speakers who will give an overview of where the German market stands at this time. They include Christian Heins, director iGaming at Tipico; Stanisław Szostak, CEO of Astral Forest; Britt Boeskov, non-executive director at Mindway AI; and Annika Lindberg, psychologist and trustee at Gordon Moody.
Oct 29-31: SBC Summit Latin America, Miami
Nov 5: Gaming in Germany, Berlin
Nov 11-14: Sigma Europe, Malta
Dec 2-4: Thai Entertainment Complex Summit, Bangkok
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